Wellesley, MA Solar Panels

The Massachusetts Residential Renewable Energy Tax Credit is a state tax credit that rewards homeowners and tenants who install solar or wind energy systems at their primary residence. This credit allows you to claim 15% of your net expenditure for qualifying renewable energy equipment, up to a maximum of $1,000. The net expenditure includes the purchase price and installation costs, minus any grants or rebates you receive from the U.S. Department of Housing and Urban Development.

To qualify, you must be a Massachusetts resident who owns or rents the property and lives there as your primary residence. You cannot be claimed as a dependent on someone else’s tax return. The renewable energy equipment must be new (original use begins with you), expected to last at least five years, and used primarily for residential purposes—such as heating, cooling, providing hot water, or generating electricity. Qualifying solar equipment includes items like solar collectors, storage tanks, and heat exchangers, while qualifying wind equipment includes windmills and wind-driven generators. However, structural components that serve dual purposes (like windows, walls, or roofs) don’t qualify, nor do general energy efficiency items like insulation or programmable thermostats.

If your credit exceeds your tax liability in a given year, you can carry the unused portion forward for up to three years. The $1,000 lifetime maximum applies per principal residence, so if you’ve claimed this credit before for the same home, you’ll need to subtract any previously claimed amounts. Joint owners can share the credit proportionally based on their ownership interest or expenditures, and condo or co-op owners may claim their proportionate share of association expenditures for qualifying systems.

Massachusetts offers a property tax exemption for homeowners who install solar energy systems on their property. This exemption means that the added value of your solar installation won’t increase your property taxes, allowing you to enjoy the benefits of solar energy without worrying about a higher tax bill. The exemption applies to both owned and leased solar systems, as well as solar systems paired with battery storage.

To qualify, your system must meet one of these criteria: produce no more than 125% of your property’s annual electricity needs, be 25 kilowatts or smaller in capacity (verified by state documentation), or have a payment-in-lieu-of-taxes agreement with your municipality. The exemption lasts for 20 years from installation, though you may be able to negotiate a longer period with your local government. This benefit is available for residential solar systems and does not apply to utility-scale solar projects. The exemption is determined annually as of July 1st each year, and you cannot combine this exemption with certain other property tax exemptions on the same property.

Massachusetts offers a sales tax exemption on solar equipment purchases, allowing homeowners to avoid paying the state’s sales tax when buying solar panels and related equipment. This exemption applies to solar energy systems and their components, helping reduce the upfront cost of going solar. Since Massachusetts has a 6.25% sales tax rate, this exemption can save you hundreds or even thousands of dollars depending on the size of your system.

The exemption is available to all Massachusetts residents who purchase qualifying solar equipment. There are no income requirements or application deadlines—the exemption is automatically applied at the point of sale when you work with a solar installer. Your solar provider will handle the exemption documentation, so you won’t need to pay the sales tax upfront or file for a refund later. This benefit works alongside other Massachusetts solar incentives to make clean energy more affordable for your home.

The ConnectedSolutions Battery Incentive is a Massachusetts state program that pays homeowners for allowing their battery storage system to help balance the electric grid during peak demand periods. When you enroll, your utility company (Cape Light Compact, Eversource, or National Grid) will automatically draw power from your battery up to 60 times each summer during high-demand periods—typically hot afternoons between 3:00 p.m. and 8:00 p.m. Each event lasts no more than three hours, and you’ll earn $275 per kilowatt (kW) based on your battery’s average contribution during these summer events.

For a typical 5 kW battery system, you could earn up to $1,375 annually just for participating in the program. Your battery can be installed alongside a new solar system, added to an existing solar setup, or installed as a standalone unit. To qualify, you must be a customer of one of the three participating utilities, and your battery must use a qualifying inverter from manufacturers like Tesla, Enphase, SolarEdge, Generac PWRCell, or others listed in the program. The inverter must be smaller than 50 kW for residential participation. Events run from June 1 through September 30 each year, excluding holidays. Massachusetts also offers 0% financing (HEAT Loans) up to $25,000 to help make battery storage more affordable for residents.

The Solar Massachusetts Renewable Target (SMART) Program is Massachusetts’ primary incentive program for solar energy systems. This state-run program provides monthly cash payments directly from your utility company (Eversource, National Grid, or Unitil) for the electricity your solar system produces. The payments continue for 10 years after your system is installed and approved, providing a predictable income stream that helps offset your solar investment.

The payment rate you receive depends on several factors, including your system size, location, utility company, and when you apply. The program uses a “declining block” structure, meaning incentive rates decrease as more solar capacity is added in each utility territory. Some blocks currently show $0.00 rates due to higher electricity prices, so it’s important to check current availability in your area. Residential systems typically fall into specific categories based on where they’re installed—such as on your roof, on the ground, or on a carport—which affects your base rate. Additional payment bonuses (called “adders”) are available if you add battery storage, qualify as low-income, or participate in community solar programs.

To participate, your system must be connected to one of the three participating utility companies, and you’ll need to submit an application through the program administrator, CLEAResult. The application process reserves your spot in a specific incentive block and determines your exact payment rate. There are no application deadlines, but the program has a total capacity limit of 3,200 MW statewide, and rates decline as capacity fills up. Homeowners should act relatively soon to secure better rates, as the declining block structure means waiting could result in lower payments or even $0.00 rates in some areas.

Net metering in Massachusetts allows you to receive credit for the excess solar energy your system sends to the electric grid. When your solar panels produce more electricity than your home uses, that surplus power flows back to the grid, and your utility company credits your account. These credits work on a 1:1 basis for most utilities, meaning you receive the full retail rate for every kilowatt-hour you export—the same rate you pay when you draw electricity from the grid.

How your credits work depends on your utility provider. If you have National Grid, Eversource, or Unitil, any excess credits carry over month to month indefinitely as a dollar value on your bill, with no annual expiration or cash payout. This means you can build up credits during sunny summer months and use them during winter when your system produces less. If you’re served by Taunton Municipal Light Department, the program works differently—your monthly production is netted against consumption each month, but any excess beyond what you used is only credited at a lower generation rate (approximately 6.5-9.5 cents per kWh) rather than the full retail rate.

Net metering is available to residential solar customers across Massachusetts, though the specific terms vary by utility company. There are no application deadlines, as this is an ongoing program that applies automatically when you connect your solar system to the grid. Understanding which utility serves your home is important, as it determines exactly how your credits accumulate and whether you’ll benefit from indefinite rollover or monthly settlement.